King Island Scheelite spends June quarter advancing Dolphin tungsten project re-development
King Island continues to progress financing discussions to fund the Dolphin project’s redevelopment.
Sydney-based King Island Scheelite (ASX: KIS) spent the three months to end June advancing the re-development of its Dolphin tungsten project off the northwest coast of Tasmania.
The company took delivery of a full-scale multi gravity separator in April at a location in Burnie, 200km from the project site.
First stage “sighter” tests commenced during the quarter, focusing on metallurgical performance and throughput.
Sighter tests are used to confirm assumptions in a conceptual flow sheet and provide initial design inputs.
Results to date have confirmed the number of units required for full-scale production at Dolphin and that metal recovery is in line with the project’s revised feasibility study.
Concentrate from the sighter tests was fed to the dressing stage (flotation) and produced results consistent with the project’s best pilot-scale results in terms of grade and recovery to dressed concentrate.
Optimisation testing is ongoing with a focus on building King Island’s understanding of the effect of machine operating parameters on the particular recovery of scheelite to concentrate.
Project financing
In May, King Island said it was progressing its discussions on Dolphin project financing and aimed to achieve closure by end July.
In its quarterly report released today, the company conceded the process was taking longer than anticipated.
It now expects to enter into a deal with a syndicate by the end of the September quarter, whereby the syndicate would provide a combination of equity, debt and a convertible instrument to finance the project.
Plant construction
During the quarter, King Island selected process engineering company Gekko Systems to undertake final design and construction of the Dolphin processing plant on a fixed-price turnkey basis.
Gekko has been involved with the project for the past three years and has been instrumental in designing the processing facilities based on assays from ALS laboratory in Burnie.
King Island said contract negotiations are being finalised and the contract would be awarded as soon as project funding had been secured.
Tungsten price
At the start of this year, the price of ammonium paratungstate – the benchmark for pricing tungsten concentrate – was US$233 per metric tonne unit (where a metric tonne unit equates to 10 kilograms).
That price rose by 20% over the first six months of the year, closing on 30 June at US$280/mtu and increasing further in July to US$290/mtu.
King Island said the price increases reflect strong demand for hard metal tools (heavily used by oil rigs), higher freight levels and delayed shipping schedules.
Demand is forecast to remain strong despite the lowest average count of oil rigs over the past seven years.
Cash position
King Island’s cash position at the close of the June quarter was $3.19 million.
The company has yet to exercise 2.5 million options priced at $0.10 each and expiring on 1 August.
It has raised $5.3 million to date from the exercise of these options.